The fiscal cliff, visualised

Outstanding US Treasuries, by maturity, 2012 to 2042

There has been many stories about the “fiscal cliff” America faces in the fourth quarter, 2012. While I’m very familiar with all the details I didn’t think any story presented the challenge faced by the American bond markets too well so I created the chart above. It shows US Treasury debt by maturity, from 2012 to 2042. No less than 52% of all US debt outstanding will mature in the next three years, and 74% matures in five years. Either America pays off or rolls over – issues more debt to pay the maturing debt – the loan.

Not a terribly comfortable situation to be in, I’m sure you’d agree. The Fed does, warning of an upcoming “crisis”. But not to worry – more quantitative easing is on the way, and some folks are saying that will drive gold to $2,000 an ounce. Oh yes.

Comments are closed.